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Tips for Good
CORPORATE HOUSEKEEPING By Matthew Gilbert, TEAM BVI Europe Team Leader
By remembering the summarised points below, you can ensure that your British Virgin Islands (“BVI”) company remains compliant with the main ongoing requirements of the BVI Business Companies Act, 2004 (the “Act”), that the company does not risk breaching financing covenants it may have entered into, and that actions of the company are not invalidated on account of a failure to follow some basic requirements.
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USE OF NAME Every written communication sent by or on behalf of a BVI company must clearly state the company’s full registered name (and any registered foreign character name), as must every document issued or signed by the company which evidences or creates legal obligations of the company. Failure to comply is an offence and the company is liable to a fine of US$1,000. A company may be registered with an additional foreign character name approved by the BVI Registrar of Corporate Affairs (the “Registrar”). Where a company is registered with an additional foreign character name the memorandum shall contain a statement that the company has a foreign character name in addition to its name and shall state the foreign character name wherever the name of the company appears in the memorandum or articles, there shall also be a reference to the foreign character name.
FINANCIAL RECORDS Every BVI company must maintain financial records which are sufficiently detailed to show and explain the company’s transactions, and which at all times will enable the financial position of the company to be determined with reasonably accuracy. Failure to keep such financial records is an offence for which the company could be fined US$10,000. This includes accounts and records (such as invoices, contracts and similar documents) in relation to: (a) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; (b)
all sales and purchases of goods by a BVI company; and
(c)
the assets and liabilities of a BVI company.
Recent case law has emphasised the expectation of the Courts that directors will review management accounts at least monthly, and will keep themselves abreast of the company’s financial position.
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BUSINESS INSIGHT | ISSUE 02 | JULY 2018
BVI Finance, Tortola BVI VG1110 E: info@bvifinance.vg | www.bvifinance.vg
